As President of Sensormatic Solutions, Tony D’Onofrio is responsible for strategic planning initiatives that support the brand’s ongoing innovation and industry-leading solutions. Of his more than thirty years in the retail industry, Tony spent more than twenty of those years at Sensormatic Solutions, most recently as the Chief Customer Officer in 2018. Since that time, Tony has been an advisor and board member of leading computer vision and Internet‑of‑Things companies, has led a global security business, and has mentored multiple companies in Silicon Valley.
LPM: Since joining Sensormatic Solutions last summer, you’ve had the opportunity to spend time with multiple customers. What is top of mind for them? Are there any common themes?
Tony D’Onofrio: Since I rejoined Sensormatic Solutions, I have made it a priority to spend time with many retail companies around the world. Regionally, in places like the United States and the UK, organized retail crime and increased violence is top of mind. Employee safety is a parallel concern to these challenges. Globally, retail theft is top of mind for everyone, and retailers continue to explore new ways to attack the problem. There is a dichotomy emerging between younger generations wanting greater frictionless shopping experiences and retailers trying to find ways to increase friction to prevent theft. An NCR study found that 55 percent of those aged 18-44 prefer self-checkout. A study published by the New York Times found 4 percent of shrink at the self-checkout in the US, UK, and other European countries. Even more alarming, a Lending Tree study found that 31 percent of Gen Zs and 21 percent of millennials admit to purposely taking an item at self-checkout without scanning it. In the United States, to increase friction, in many stores you will find items behind glass requiring store associate assistance. We know from many historical studies that too much friction, like locking up items, decreases sales. Not enough friction leads to high theft. We are still searching for that balance. Finally, RFID, along with computer vision, is coming up as technologies are being adopted specifically for loss prevention by many retailers around the world.
LPM: You participated in the 2023 NRF Fight Retail Crime Day in Washington, DC, to support the Combating Organized Retail Crime Act. Can you explain a little about the event, key takeaways, and what is on the horizon?
D’Onofrio: Proudly, I represented Sensormatic Solutions at the important 2023 NRF Retail Crime Day. According to the latest NRF Security Survey, 78 percent of retailers see ORC as more of a priority than the previous year. As I have told many audiences when I speak about the topic of ORC, it is time that we, as the good guys, along with retailers, took a cue from ORC crime and got a lot more organized to fight it. This Washington, DC event is an example of this where retailers and solution providers jointly went to Capitol Hill to express our concerns with ORC and pushed jointly for the passage of the Combined Organized Retail Crime Act (CORCA). As a follow-up to this event, Sensormatic Solutions is now working with the NRF, the NRF Loss Prevention Council, and our parent company, Johnson Controls, which has a government affairs office in DC, to get further organized in helping laws get passed that make retail stores safer and more secure.
ORC gets addressed by next-generation innovative solutions, legal frameworks around controversial technologies, working together to pass laws such as CORCA, and stronger partnerships between retailers, law enforcement agencies, industry groups, solutions providers, and government entities.
LPM: ORC continues to plague retailers. How have you seen intelligence-led loss prevention empower retailers to fight back against ORC?
D’Onofrio: On my return to Sensormatic Solutions, I made it a priority to accelerate technology solutions that attack ORC. At the NRF Big Show in January, we unveiled a new solution called Shrink Analyzer. This cloud-based application collects crime data in the cloud from RFID‑enabled smart exits to identify ORC events, correlate them with POS data, and integrate them into video platforms for visual evidence. The new product has taken off with many major retailers now in advanced pilots. We are just getting started in creating innovative solutions that combine data and visual intelligence to accelerate investigations and further reduce retail shrink.
Building an ecosystem of integrated applications is a major trend that retailers are now pursuing in loss prevention. This is an important trend that Sensormatic Solutions fully supports. Layers of intelligence are needed to attack ORC effectively.
LPM: What are the three biggest challenges retailers are currently facing, and how is Sensormatic Solutions partnering with retailers to help?
D’Onofrio: The three biggest challenges I see in retail start again with ORC and external theft in general. More intelligent loss prevention solutions are the answer, and the Shrink Analyzer is an example of one such solution.
Because of increasing crime, retailers, especially in the United States, are locking up products for sale. Coresight Research confirms that if a consumer sees an item locked up, 26 percent will shop elsewhere, and a similar 26 percent will shop online. The answer is increased and differentiated protection of the actual products for sale. Sensormatic is currently working on new approaches that will both protect products and assist in identifying how they are being stolen.
The third biggest challenge I see for retailers is the disturbing data presented by the 2024 Retail Worker Safety Survey conducted by Theatro. Eighty percent of store workers responding to the survey said they were scared every day at work. Sensormatic is committed to developing technologies that keep employees safe. An entire suite of solutions from EAS, RFID, and video is already available to help. More is on the way, with a focus on advanced deterrence to deliver the message that we are serious about fighting retail crime.
LPM: What do you think the next three to five years will look like for loss prevention?
D’Onofrio: In spring 2023, according to Bloomberg, 200 retailers at the CEO and CFO levels mentioned retail shrink as a negative factor impacting quarterly results. Retail loss prevention is at a pivotal moment in time when its importance as a function is being elevated. Concurrently, retail as an industry is undergoing dramatic change. Consumers are digitally empowered to instantly switch brands when they encounter poor customer experiences. Prior to the pandemic, we were worried that physical stores would go away in what was labeled the “retail apocalypse.” The opposite trend emerged post-pandemic. Physical stores are more important than ever for both local consumers and as micro-fulfillment centers for online orders. All this means that the definition of loss prevention, just like the rest of retail, needs to be harmonized across both physical and online stores. This is a trend that will increase in the next three to five years.
Frictionless commerce is here to stay as younger generations are demanding it. This trend will introduce greater challenges in protecting products for loss prevention. Computer vision, along with artificial intelligence, will be combined into smarter, more aggressive deterrent solutions. Serialization of all products will continue, and those products will lead to a smart way to track them for crime control.
